TERRY L. NORMAN, APPELLANT,
v.
JACK "JACKSON" PADGETT, MARK NEGRETE, GEORGE L. KESSINGER, ADAM BURNETT AND RONALD F. GOFRANK, APPELLEES
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Terry Norman appealed from summary judgment against his breach of contract claim and from a judgment in favor of buyers on their fraud counterclaim arising from the sale of business shares. The court affirmed the summary judgment on the breach of contract claim but reversed the fraud judgment, finding the buyers could not reasonably rely on the alleged misrepresentation about payroll costs because they possessed contradictory information.
The buyers were not justified in relying on the alleged misrepresentation because they either knew of its falsity or the falsity would have been obvious to them based on their own pro forma document showing much higher payroll costs.
[1] A party is not justified in relying on a fraudulent misrepresentation if the party knows the representation is false or its falsity is obvious.
[2] A pro forma document indicating labor costs exceeding a stated representation can render reliance on the lower representation unjustifiable.
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Join FLexlaw to unlock all legal intelligence“The recipient of a fraudulent misrepresentation is not justified in relying upon its truth if he knows that it is false or its falsity is obvious to him.”
Establishes the legal standard for reasonable reliance in fraud claims, which requires that the falsity not be known or obvious to the recipient.
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Join FLexlaw to unlock all legal intelligenceNorman sold his shares in Gat Bar, Inc. to the defendants. The sellers allegedly misrepresented that weekly payroll expenses would be $17,500, when th…
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Appellant, Terry Norman, appeals from a summary judgment entered against him on his claim for breach of contract against the buyers of his shares in Gat Bar, Inc., and also from a final judgment entered against him after a non-jury trial on the buyers’ counterclaim for fraud in the inducement concerning the sale of the stock. Without further discussion, we affirm the trial court’s entry of summary judgment against Norman on his claim against the buyers for breach of contract. However, we reverse the final judgment in favor of the buyers on their counterclaim for fraudulent inducement.
The sufficiency of the evidence is an issue of law reviewed de novo. See Fina v. Hennarichs, 19 So.3d 1081, 1084 (Fla. 4th DCA 2009). “When an action has been tried by the court without a jury, the sufficiency of the evidence to support the judgment may be raised on appeal whether or not the party raising the question has made any objection thereto in the trial court or made a motion for rehearing, for new trial, or to alter or amend the judgment.” Fla. R. Civ. P. 1.530(e).
The issue we address in this case is whether the buyers were justified in relying on the alleged fraudulent misrepresentation regarding the payroll costs of the business.
“The recipient of a fraudulent misrepresentation is not justified in relying upon its truth if he knows that it is false or its falsity is obvious to him.” Besett v. Basnett, 389 So.2d 995, 997 (Fla.1980).
Here, the gravamen of the fraudulent inducement claim was that one of the sellers of the business falsely represented that the payroll expenses for the business would be $17,500 per week, when in fact the weekly payroll expenses were over $15,000 higher. However, in a pro forma document that one of the buyers prepared before purchasing the business, there is a section labeled “Staffing Assumptions,” which indicates that the total labor costs would be over $35,000 per week. Thus, the buyers were either aware of the falsity of the alleged misrepresentation or its falsity would have been obvious to them. On these facts, Norman cannot be liable for fraudulent misrepresentation.
Accordingly, we reverse the final judgment and remand for entry of judgment in favor of Norman on the buyers’ counterclaim.
Affirmed in part, Reversed in part, and Remanded.
MAY, C.J., TAYLOR and GERBER, JJ., concur.
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Wells Fargo Bank, N.A. v. Hilary A. Williamson, 199 So. 3d 1031 (Fla. 4th DCA 2016)…sed upon legal error, the standard of review is de novo.” Acoustic Innovations, Inc., v. Schafer, 976 So. 2d 1139, 1143 (Fla. 4th DCA 2008) (citation omitted). “The sufficiency of the evidence is an issue of law reviewed de novo.” Norman v. Padgett, 125 So. 3d 977, 978 (Fla. 4th DCA 2013). This case is controlled by Vidal v. Liquidation Properties, Inc., 104 So. 3d 1274 (Fla. 4th DCA 2013). There, the borrowers raised the affirmative defense of fraud based on the false inflation of their income on a loan app…
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Jackson Padgett and Mark Negrete v. Kessinger, 190 So. 3d 105 (Fla. 4th DCA 2015)…gment on the counterclaim. On appeal, we affirmed the summary judgment against Norman on his claim for breach of contract, but reversed the final judgment in favor of the buyers on their counterclaim for fraudulent inducement. See Norman v. Padgett, 125 So. 3d 977 (Fla. 4th DCA 2013). We held as a matter of law that Norman was not liable for fraudulent misrepresentation, and we remanded for entry of judgment in favor of Norman on the buyers’ counterclaim. Id. at 978. Meanwhile, during the pendency of the app…
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Whittaker v. Whittaker, 331 So. 3d 719 (Fla. 4th DCA 2021)
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Besett v. Basnett, 389 So. 2d 995 (Fla. 1980)
- Fina v. Hennarichs, 19 So. 3d 1081 (Fla. 4th DCA 2009)